* Payrolls report expected to show improved jobs growth
* S&P may be vulnerable after strong January gains
* Exxon and Chevron on tap to report results
* Futures up: Dow 63 pts, S&P 4.4 pts, Nasdaq 6.5 pts
By Ryan Vlastelica
NEW YORK, Feb 1 (Reuters) - U.S. stock index futures were higher on Friday as investors looked ahead to a labor market report expected to show jobs growth picked up in January.
* The non-farm payrolls report is expected to indicate that 160,000 jobs added in January, compared with 155,000 in the previous month, a sign that the recovery remains intact despite an unexpected contraction in fourth-quarter gross domestic product. The report is due at 8:30 a.m. EST (1330 GMT)
* While Thursday’s jobless claims report was weaker than forecast, many recent indicators, including the ADP employment report and personal income data, have pointed to stronger economic growth.
* The market could be vulnerable to a pullback if the report comes in weaker than estimated, with the S&P 500 coming off its best monthly performance since October 2011. However, investors have been buying on dips over the past four weeks. The largest daily decline in the S&P 500 so far this year was Wednesday’s 0.39 percent drop, which came after the GDP data.
* S&P 500 futures rose 4.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 63 points, and Nasdaq 100 futures rose 6.5 points.
* The index advanced 5.1 percent in January, with gains driven by a strong start to the earnings season and a compromise in Washington that postponed the impact of the “fiscal cliff.” So far this week, the Dow is down 0.3 percent, the S&P is off 0.3 percent, and the Nasdaq has dipped 0.2 percent.
* Merck & Co Inc reported quarterly results early Friday.
* While the payroll report will likely be the primary market driver, corporate earnings will stay in focus. Exxon Mobil Corp and Chevron Corp, both Dow components, are on tap to report on Friday.
* Of the 231 companies in the S&P 500 reporting earnings so far, 69.3 percent have exceeded expectations, according to Thomson Reuters data through Thursday morning. That is a higher proportion than over the past four quarters and above average since 1994.
* Overall, S&P 500 fourth-quarter earnings rose 3.7 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season but well below a 9.9 percent profit growth forecast on Oct. 1.
* Friday will also bring reports on consumer sentiment, U.S. manufacturing, construction spending and car sales. January sentiment is seen edging slightly higher in the month while construction spending rises 0.6 percent in December.
* U.S. stocks closed lower on Thursday as investors became cautious ahead of the payroll report.